GameStop offers $55.5 billion for eBay, backed by a $9 billion cash reserve, a $20 billion letter from TD Bank, and a dwindling retail sector.

      **TL;DR** GameStop has made an unsolicited bid of $55.5 billion for eBay, offering $125 per share, financed by $9 billion in cash from convertible debt, a $20 billion non-binding financing letter from TD Bank, and around $28 billion in new stock from GameStop. The market remains doubtful: eBay shares opened at $110, substantially below the bid, while GameStop shares declined, and investor Michael Burry criticized the strategy as "pedestrian" before announcing plans to sell his shares. CEO Ryan Cohen believes the merged entity could stand up to Amazon, despite GameStop's revenue dropping by a third over the last two years and its core retail business facing a downturn.

      Ryan Cohen disclosed on Saturday that GameStop has put forward a non-binding proposal to acquire eBay for $125 per share, which equates to an estimated total of $55.5 billion for the e-commerce platform. At the time of the proposal, GameStop's market capitalization was $11.9 billion, while eBay's stood at $46.2 billion. The acquiring company is about a quarter the size of the one it aims to purchase, having suffered a revenue loss of over 25% in the past year, shuttered more than 700 stores since 2024, and made financial moves such as issuing $4.2 billion in zero-coupon convertible debt and investing in Bitcoin. Cohen stated on CNBC that the combined company would be a "legit competitor to Amazon." The market reacted accordingly, with eBay shares climbing 6% to $110, still below the bid price, while GameStop's shares decreased.

      **The pitch**

      GameStop's offer is comprised of 50% cash and 50% GameStop stock, allowing eBay shareholders to select their preferred mix, subject to allocation. TD Bank has issued a non-binding "highly confident letter" to support up to $20 billion in debt financing. The funding shortfall between this commitment, GameStop's $9 billion cash reserves, and the $55.5 billion transaction price would be addressed by issuing new shares, which depends on eBay shareholders accepting equity in a company whose stock is influenced heavily by market sentiment as much as by fundamentals.

      The strategic vision revolves around three assertions. First, GameStop’s 1,600 remaining retail stores in the U.S. could function as physical sites for eBay's marketplace, serving as drop-off locations, authentication centers, fulfillment hubs, and venues for live sales of eBay products. Live selling is already taking off in Europe, with platforms like Whatnot experiencing a 600% year-on-year growth in sellers, and McKinsey forecasting that 20% of online sales will occur through live shopping by year's end. Cohen believes physical stores can anchor this format in the U.S. Second, GameStop's expertise in collectibles, trading cards, and used goods aligns with eBay's main categories. Third, he estimates $2 billion in annual cost savings could be achieved within a year of closing the deal.

      **The numbers**

      GameStop's revenue for the fiscal year ending January 2026 was $3.63 billion, down from $5.27 billion two years prior. Sales of hardware and accessories dropped by 28%, with software sales falling by 15%. The company closed 590 stores in fiscal 2024 and another 400 in January 2025 alone. Its core business, focused on selling physical video games and consoles in a market that predominantly favors digital distribution, is in decline. Profitability has come from significant cost reductions, not growth, with net income hitting $127.9 million amidst declining revenue.

      Conversely, eBay reported $11.1 billion in revenue for 2025, an 8% increase year-on-year, with gross merchandise volume nearing $80 billion and revenue for the year ending March 2026 rising by 12.5%. The company possesses $4.8 billion in cash and investments, initiated a $2 billion share buyback in February, and carries a market capitalization indicative of a business with healthy margins and a well-established global presence. eBay is not a distressed asset seeking a savior but a profitable, expanding firm being approached by a smaller, shrinking one.

      GameStop's $9 billion cash position, touted by Cohen as proof of the company's ability to fulfill the deal, was not earned through its retail operations. It was acquired through convertible debt: $4.2 billion in zero-coupon bonds from two offerings in 2025, alongside previous share offerings during the meme stock surges of 2021 and 2024. Although the cash reserve exists, the critical concern remains whether a fund built on financial engineering and retail investor excitement can serve as genuine acquisition currency for a company four times its size.

      **The skepticism**

      Market uncertainty is highlighted by eBay's share price. They began trading at $110, which